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Currency Outlook

Rupee Outlook

* Rupee appreciated yesterday positing its biggest one day gain in more than 2 months likely due to dollar inflows into equity markets. Additionally, as per media sources India’s central bank has asked some banks to stop taking fresh arbitrage positionsin the non-deliverable forwards market

* Rupee is likely to continue with its appreciation mode amid retreat in dollar and rise in risk appetite in the global markets. Dollar is showing weakness as disappointing economic data from US bolstered expectations that Fed will pause its rate hike campaign and dragged down US treasury yields ahead of Jackson hole symposium. Further, rupee may gain strength on softening of crude oil prices. US$INR is likely to slip further towards 82.30 level as long as it stays below 82.80 level

Euro and Pound Outlook

* Euro ended on positive note aided by weakness in dollar and optimistic global market sentiments. Meanwhile, sharp upside was capped as survey data showed German and Euro Area business activity slumped by more than expected in August. For today, EURUSD is likely to rise further towards 1.0920 level as long as it trades above 1.0830 level amid soft dollar and improved global market sentiments. EURINR may hold the support near 89.30 level and move north towards 90.20 level

* Pound edged lower yesterday but recouped most of its losses amid retreat in US dollar and rise in risk appetite in the global markets. For the day, the pair is expected to face the hurdle near 1.2770 and weaken towards 1.2640 on fears that UK economy is slowing and heading for recession as it fell the heat of aggressive rate hike. GBPINR is likely to weaken towards 104.30 level as long as it trades under 105.20 levels

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